How should a company respond to a competitor's price change

DEVELOPING PRICING STRATEGY AND PROGRAMSPart

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How should a company respond to a competitor’s price change

In Homogenous market

Price cut by competitor Price increased by competitor

-enhance your product-lower your price

Increase your Price accordingto buyer’s response

In Non-Homogenous market

Consider the following issue

Why did competitor change the price

Does the competitor plan to make the pricechange permanent or temporary

What will happen to company’s market share and profit

Are other companies going to respond

3 Possible responses to low cost competitors

Further differentiate the product or service

Introduce a low cost venture

Reinvent as a low cost player

Disclaimer

Created by Khemendra Raj Pingoliya, IIT Kanpur during an internship

by Prof. Sameer Mathur, IIM Lucknow.

www.IIMInternship.com

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